Did you know that Airbnb almost failed as a company?
Yes, at one point, they were making just $200 a week – just about enough to cover a week’s expenses. They had a great idea, but it seemed like no one was noticing, and very few were actually booking the properties listed on their website.
Consequently, their revenue remained stagnant, showing no signs of growth.
In a last-ditch effort to save their business, the founders decided to come together and analyze what was going wrong and how they could fix it.
They embarked on a comprehensive examination of every aspect of their operation. What they discovered was quite surprising. After speaking to people and conducting surveys, they realized that one of the major problems was the poor quality of the pictures on their website.
The images failed to inspire confidence in the properties, even if the properties themselves were excellent. Some showed cluttered rooms with unnecessary items scattered around, creating a negative impression.
It’s a bit like those food outlets where you see a mouthwatering picture of a perfectly crafted burger versus one with a sad, flattened burger in a dull, yellowed image.
Even if you were hungry, the latter wouldn’t tempt you.
So, Airbnb’s main issue was identified: bad pictures. To address this, the founders took a bold step. They bought a digital camera and personally visited each property listed on their site.
Since they were only operating in the New York region at the time, this was feasible.
But they didn’t just take photos; they cleaned and spruced up the rooms, rearranging furniture as needed. Then, they captured high-quality pictures and replaced the old ones.
Almost miraculously, people began booking Airbnb properties almost overnight, and the business started to turn around and grow.
By 2022 the company was generating $8 billion dollars in annual revenue. That’s quite a remarkable transformation, from barely scraping by to reaching such substantial revenue figures.
It is remarkable how simple their solution was. So simple, that it might have seemed unlikely to make any difference. But any entrepreneur knows never to underestimate even the smallest aspects of the business.
Now, let’s examine how Airbnb’s journey aligns with the six skills outlined in my book.
Certainly, let’s expand on the analysis of the Airbnb story in the context of the six skills outlined in your book:
Step 1 – Critical Thinking:
Airbnb’s founders exhibited critical thinking by recognizing that their business was on the brink of failure when they were making only enough to cover a week’s expenses.
They accurately assessed the precarious situation they were in, and understood that change was necessary.
**2. Change Mindset:**
Instead of giving in to despair and the “paralysis of fear”, Airbnb’s founders embraced a change mindset.
They exhibited immense courage to confront the crisis head-on. They refused to accept defeat and committed themselves to finding a solution, thereby demonstrating the resilience needed to pivot in times of adversity.
As an entrepreneur I know this is never easy.
Step 3 – Complex Problem Solving:
The founders embarked on a complex problem-solving journey.
They meticulously analyzed every facet of their business, from the ground up.
This involved breaking down the problem into smaller, more manageable parts, such as examining their marketing, user experience, and customer feedback.
Step 4 – Creativity:
This particular problem needed creativity on multiple levels to solve. Firstly, they needed to be creative to find a solution, and then they needed to be creative to implement it.
They basically had to become interior decorators and photographers to produce the kind of photos that would be appealing to their market. This would have definitely entailed some sort of learning.
Step 5 – Collaboration:
Collaboration within the founding team played a significant role.
They worked together to brainstorm ideas, analyze data, and formulate a strategy.
This internal collaboration brought the team together towards a common goal which likely gave the team the encouragement it needed, but was also ultimately the key to finding a solution.
Beyond their team, they collaborated with property owners to improve the quality of listings. This external collaboration strengthened the company’s relationships with the hosts and likely went a long way towards enhancing the overall customer experience.
Step 6 – Communication:
Your company’s website is a communication tool, designed to present your products and services in a way that will be appealing to your target audience.
Many organisations tend to forget this, either neglecting their websites or choosing form over function and missing the point.
Ultimately, Airbnb’s website was discovered to be the root cause of their problems, and had to undergo a major transformation as a communicator.
It went from displaying unattractive, uninviting property photos to showcasing high-quality, appealing images.
This seemingly small visual change made a huge difference: it effectively communicated to the potential customers that the properties listed were worth renting, and built up their trust and confidence encouraging them to make bookings.
It is mind-boggling how such a small change can make such a huge difference!
The Airbnb story is perfect example of how the application of the 6 power skills can lead to the successful revival of a struggling business.
There is a lot that entrepreneurs and business leaders can learn from this case study, but to me the most important lesson that stands out, is that there is no detail too small!
Can you replicate this level of success? Absolutely! But it calls for courage, unwavering determination, and the application of the 6 power skills.